The race to digitalize the humble corner store

Recent trends and insights about small enterprise in the digital age, brought to you by Caribou Digital’s Dr Nicolas Friederici

In an in-depth article in The Atlantic, journalist Louise Matsakis explores the global race to digitalize small retailers and corner shops. Her piece illustrates a growing awareness of the impact of digital technologies on small businesses around the world — and crucially — of the massive investment opportunity that comes with it.

Matsakis does an excellent job of highlighting the value of corner stores for the digital economy. However our experience is that for digital growth to be truly inclusive, we need much more than investment in tech startups.

Small shops, big tech

Small, often informal corner stores are ubiquitous around the world, especially in low-income countries.

Matsakis highlights the role that these stores play as a last-mile outlet for supply chains and logistics, and how important they are to help big tech companies reach digitally excluded consumers.

Corner stores represent a vast addressable market for tech providers

She focuses on the promise of digital solutions for corner stores. As indispensable partners for tech companies, shops can gain new income streams and become more efficient.

As such, they represent a vast addressable market for tech providers. Her piece notes how the investment craze is gaining momentum, with players like Amazon and Coca Cola rapidly entering the fray.

Stores as networks

Awareness is certainly growing of how small businesses around the world are impacted by digital transformation, not least because of the pandemic. Digital tech continues to inspire the promise that it can deliver growth and inclusion at the same time.

Increasingly, large media outlets are going into depth about what the digital transformation means to businesses like small convenience stores outside of the US and Europe.

It’s also refreshing to see The Atlantic outlining the important role small businesses play for the wider digital economy. The article nicely showcases how nanostores work as distributors for global supply chains and as physical interfaces that allow people in remote and rural areas to connect with digital networks.

Finally, Matsakis’ piece helps the broader public understand how small and big businesses, locally and globally, are interconnected and can benefit from each other.

Partnerships are key

The digitalization of corner stores will continue. But tailored support and small business-centered partnerships will be needed for this growth to be inclusive, beyond the investments in tech solutions we are hearing about.

As Matsakis points out, venture capital is pouring into the market to digitalize small businesses. In South East Asia in particular, investment funds are betting that tech startups that offer software and apps to digitalize small business operations (like BukuWarung, Osome, or Ula) are offering solutions that corner shops will use and pay for.

Empowered not squeezed

At the same time, small businesses may feel squeezed rather than treated as partners. In India, a heated debate has begun over tech apps’ role in driving down prices and exerting undue control over small shops, possibly pushing them out of business rather than boosting their sales.

Resistance to more aggressive startup-led models shows that small businesses need to be actively empowered to make effective use of new tech solutions, especially through improved digital skills.

Such intentional upskilling can come from tech companies like Strive Community partner, Grab, but also from new players that are uniquely dedicated to empowering small businesses, like our implementation partners Shujaaz and Arifu in Kenya.